Amy Dalrymple, Forum News Service, Published May 23 2012
ND official says state could double oil productionBISMARCK – Oil development could push North Dakota’s population to 1 million people, the state’s director of mineral resources said Wednesday as one of his predictions for the state’s future.
Lynn Helms laid out three possible scenarios for North Dakota during the second day of the Williston Basin Petroleum Conference.
If all the possible risk factors go wrong, North Dakota would max out at 650,000 barrels of crude oil production per day and hold at that rate for two to three years before declining. The state currently is producing about 575,000 barrels per day, recently passing Alaska in production and is now second only to Texas among crude oil producing states.
Under a middle-of-the-road scenario, Helms predicts North Dakota will hit 800,000 barrels of oil per day and hold for 10 to 12 years before declining.
And if all works in North Dakota’s favor, the state would hit 1 million barrels of oil per day by 2015, creating tens of thousands of new jobs and the potential for a population of 1 million.
“If everything works out, then we’re going to chase Texas,” Helms said.
North Dakota will continue to add more jobs to support the oil development. The boom already has created thousands of jobs, and Helms said the figure would likely peak at 65,000 new jobs by 2020. Using a multiplier for the number of additional jobs that will be required to support that population, Helms said he can envision North Dakota with 1 million people. The 2011 Census estimate put North Dakota’s population at 683,932.
Meanwhile, executives from oil exploration companies talked Wednesday about testing other geological formations and improving technology to recover more oil.
A Continental Resources executive said the company is testing lower benches of the Three Forks Formation, which is below the Bakken shale where most of the North Dakota oil is coming from now. The results of those tests are remarkable, he said.
“The actual definition of the Bakken will be redefined,” said Jack Stark, senior vice president for exploration of Continental Resources, the company that led the development of horizontal drilling in northwest North Dakota.
The incentive to improve recovery rates is huge. If producers can increase oil recovery by 1 percent, that could mean a total of 2 billion to 4 billion more barrels of oil from North Dakota, Helms said.
North Dakota hit a record 213 drilling rigs Tuesday, Helms said. The state is expected to level off at 225 rigs by the end of the year, he said.
If that rig count stays steady, it would take 16 years to drill all the needed wells, Helms said.
But risk factors threaten North Dakota’s potential, Helms said. He listed four dangers:
• Changes in the global economy that could drop oil prices.
• Proposed federal tax changes that would affect the oil industry.
• Federal permitting regulations that slow oil development.
• The federal Environmental Protection Agency overreaching on hydraulic fracturing regulations
Other speakers, including David Hobbs of IHS CERA, a company that specializes in supplying decision-making information on key issues including energy, cautioned about the risks presented by opponents of fracking and other critics of the oil and gas industry.
Hobbs recommends that industry officials take those opponents seriously and act responsibly because the world is watching North Dakota.
“The responsibility not just for North Dakota but for the world lies on your shoulders as you move forward in terms of the ways in which you operate, the ways in which you address your stakeholders and the ways ultimately in which you enable the economic growth that America will enjoy over the coming decades.” Hobbs said.
The conference, which was up to 4,025 people by Wednesday afternoon, concludes today.
Jack Gerard, president of the American Petroleum Institute, said the model developed in North Dakota should be used across the country.
“We can take control of our energy future right here in the United States,” Gerard said.
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Dalrymple is a Forum Communications Co. reporter stationed in the Oil Patch.
She can be reached at firstname.lastname@example.org or (701) 580-6890.